CITY OF ALAMEDA Memorandum. Honorable Mayor and Members of the City Council. John A. Russo City Manager. Date: March 5, 2013

CITY OF ALAMEDA Memorandum To: From: Honorable Mayor and Members of the City Council John A. Russo City Manager Date: March 5, 2013 Re: (1) Authorize the City Manager to Execute a Letter of Support to the United States Navy for Modification to the Surplus Determination of Land at the Former Naval Air Station Alameda; (2) Approve a Non- Binding Term Sheet between the United States Department of Veterans Affairs and the City of Alameda in Substantial Conformance with the Proposed Term Sheet BACKGROUND Upon closure of Naval Air Station Alameda (NAS Alameda) in 1997, the United States Navy (Navy) intended to transfer approximately 550 acres of upland property -- primarily comprised of the former runways -- to the United States Fish and Wildlife Service (USFWS) for a wildlife refuge via a federal-to-federal transfer. Additionally, the Navy intended to convey the remaining land west of Main Street to the City of Alameda to implement the 1996 Community Reuse Plan (Reuse Plan). The negotiations between the Navy and USFWS did not result in a federal-to-federal transfer for a wildlife refuge, primarily due to an impasse over long-term environmental liability issues. As a result, the Navy entered into discussions with the Department of Veterans Affairs (VA) for a federal-to-federal transfer to allow the VA to construct an outpatient clinic, administrative offices, columbarium, and Conservation Management Office (VA Project) on the property (Exhibit 1). Concerns were raised about the proximity of the VA Project to the endangered California Least Tern (Least Tern) colony. By constructing the VA Project a sufficient distance from the Least Tern colony, including on land that the Navy had planned to convey to the City in the Northwest Territories, the VA will be able to construct the VA Project at a greater distance from the Least Tern colony. As a result, the Navy now proposes transferring 624 acres of former runways at the former NAS Alameda to the VA via a federal-to-federal transfer (Federal Transfer Parcel). The VA proposes constructing the VA Project on 112 acres of the Federal Transfer Parcel to serve the needs of veterans throughout the Bay Area, including 74 acres of land that the Navy had planned to convey to the City in the Northwest Territories (Flex Parcel) (Exhibit 2). The remaining 512 acres of the Federal Transfer Parcel will remain undeveloped and be reserved for the long-term conservation of the endangered Least Tern. City Council Agenda Item #6-8 03-05-13

Honorable Mayor and Members of the City Council March 5,2013 Page 2 of 5 Pursuant to Section 7 of the federal Endangered Species Act, USFWS issued a favorable Biological Opinion (BO) in 1999 for the City's development contemplated in the Reuse Plan, including terms and conditions to avoid jeopardy to the continued existence of the endangered Least Tern and California brown pelican. In August 2012, USFWS issued a new BO that superseded the 1999 BO to address the impacts of the VA Project, and the City's project contemplated by the Reuse Plan (Exhibit 3). The 2012 BO contains both terms and conditions, and avoidance and minimization measures, (AMMs) to mitigate impacts to the Least Tern. 1 The VA's undeveloped portion of the runways is subject to extensive restrictions imposed by the 2012 BO, which provide for the protection of the Least Tern in perpetuity. DISCUSSION Staff recommends that the City Council take two actions this evening to support the VA Project: 1. Navy Support Letter Staff recommends that the City Council authorize the City Manager to execute a letter of support (Exhibit 4) to the Navy for continuing federal ownership of the Flex Parcel. The Navy will accomplish this by modifying their determination of surplus property at NAS Alameda pursuant to the Base Realignment and Closure Act process. Upon modification of the surplus determination by the Navy, the Flex Parcel will remain under federal ownership and not be transferred to the City. 2. Non-Binding Term Sheet with the VA Staff also recommends that the City Council approve a non-binding Term Sheet with the VA (Term Sheet) that provides a roadmap for future coordination and cooperation between the VA and City (Exhibit 5). The Term Sheet contains the following major provisions subject to future environmental review, required VA approvals, applicable federal laws and regulations, and funding availability: Infrastructure on VA Property. The VA will construct a roadway and utilities along the northern border of their property that will provide access and utility capacity to the City's Sports Complex and open space in the Northwest Territories, including water, sanitary sewer, and electrical utilities. This saves the City approximately $1.8 million in utilities and $5.2 million for roadway construction for a total of $7 million in infrastructure costs. Access to VA Property. The City will grant an easement at no-cost for street access and utility improvements to the VA along West Redline Avenue in the northern portion of the City's property, once transferred to the City by the Navy. I The California brown pelican has since been removed from the list of threatened and endangered recovery. species due to

Honorable Mayor and Members of the City Council March 5, 2013 Page 3 of 5 Infrastructure Outside VA Property. The VA will construct roadway and utility improvements along West Redline Avenue and Lexington Street, as well as other portions of the City property, including water, sanitary sewer, electrical, gas, telephone, CATV, and storm drain utilities. This saves the City approximately $5.5 million in infrastructure costs. Continuing Use of VA Property. The VA will allow the City to continue to rent the runways for events and activities consistent with their existing use until the VA commences construction. The City has already discussed the future relocation of the Antiques by the Bay monthly event to another location at the former NAS Alameda with its owner and will continue to coordinate closely with the owner as the VA Project is implemented. Pedestrian and Bicycle Trail. The VA will provide an easement to the City for a seasonal pedestrian and bicycle trail (Trail) around the southern and western borders of the Federal Transfer Parcel during the Least Tern's non-breeding season. This Trail will be linked to other portions of the Bay Trail planned for the City's portions of the former NAS Alameda. Other Provisions. There are other provisions in the Term Sheet related to coordination of storm drain improvements, VA coordination with the local transit authority, light sharing as required by the 2012 BO, and VA consideration of support for grants that the City may try to obtain for improvements and projects at the former NAS Alameda. If the VA Project is constructed as envisioned in the Term Sheet, it is expected that the City will save approximately $12.5 million in infrastructure costs. These were costs that the City had included in its previous infrastructure cost estimates for its future development. These cost savings will help facilitate open space in the Northwest Territories, the Sports Complex and reuse and development in the NAS Alameda Historic District by reducing the infrastructure costs associated with these projects. FINANCIAL IMPACT There is no financial impact to the City's General Fund. As stated above, if the VA Project is constructed as envisioned in the Term Sheet, it is expected that the City will save approximately $12.5 million in infrastructure costs for development of the former NAS Alameda. Upon implementation of the VA Project, there may be a decrease in license revenue associated with the events and activities that were held on the Flex Parcel in the Northwest Territories. The Base Reuse Department will attempt to relocate these activities, to the extent possible, to other locations within its control.

Honorable Mayor and Members of the City Council March 5, 2013 Page 4 of 5 MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE These actions are consistent with Resolution supporting the VA Project approved by the Alameda Reuse and Redevelopment Authority on September 1, 2010 (Exhibit 6). ENVIRONMENTAL REVIEW The proposed non-binding Term Sheet is not a "project" for purposes of the California Environmental Quality Act (CEQA) because it does not commit the City to a definite course of action. It is an agreement in principle to take certain actions with regard to infrastructure, site access and transit. The Term Sheet expressly reserves the City's full discretion to mitigate environmental impacts, select other feasible alternatives that will avoid environmental impacts, balance the benefits of any future actions against the environmental impacts, or decline to carry out any of the terms, all based upon information generated by the environmental review process (Term Sheet, Article 1.A.). With regard to the federal activities described in the Term Sheet, the City has no jurisdiction over those federal activities. Because the Term Sheet is not a project for purposes of CEQA, sending a letter in support of federal activities also is not a project. RECOMMENDATION 1) Authorize the City Manager to execute a letter of support to the United States Navy for modification to the surplus determination of land at the former Naval Air Station Alameda; and 2) Approve a non-binding Term Sheet between the United State Department of Veterans Affairs and the City of Alameda in substantial conformance with the proposed Term Sheet. Rfp~ctullY submitted,! \ I, t\( \ I Jennifer\Ott Chief op't1ating Office - Alameda Point Financial Impact section reviewed, Fred Marsh Controller

Honorable Mayor and Members of the City Council March 5, 2013 Page 5 of 5 Exhibits: 1. Map of VA Development and Base Reuse Plan 2. Map of Flex Parcel 3. Biological Opinion on the Proposed Naval Air Station Alameda Disposal and Reuse Project in the City of Alameda, Alameda County, California, August 29, 2012 4. Letter of Support for Modification of the Surplus Determination for the former Naval Air Station Alameda 5. Formal Term Sheet between U.S. Department of Veterans Affairs and the City of Alameda, California 6. Alameda Reuse and Redevelopment Authority Resolution of Support for VA Project, September 1, 2010

Conservation Management Office Area (Nature Center) 2.4 ac Regional Park (NWT) 147 ac Northwest Territories (NWT) NCA Cemetery OPC Area 80.0 ac 20.0 ac Figure 1 Former NAS Alameda Alameda Point VA D e v e l o p m e n t a n d Base Reuse Plan Sports Complex (NWT Portion) 25 ac August 8, 2012!! VA Fed Transfer Parcel and Development m 5386 ft) 6 (17 VA Undeveloped Area 511.2 ac Civic Core Area Area Subject to Biological Opinion VA Parcel Boundary (623.6ac: 112.4 ac developed, 511.2 ac undeveloped) Access Road / Utility Corridor (off-site) 650m Setback from Tern Colony (Berm Height) VA Development Area NCA Cemetery Outpatient Clinic Area Conservation Management Office Area (Nature Center) Road Right of Way (Approximately 10 ac) California Least Tern Colony (9.7 ac) Trail Main Street Neighborhood Least Tern Colony 9.7 ac Marina Area Inner Harbor NoWake Zone! Breakwater Gap Base Reuse Plan City of Alameda Submerged Lands Conservation Easement or Other Enforceable Property Interest No-Wake Zone Watercraft Exclusion Zone Building Development Zones Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Area of Allowed Future Development within City color-coded areas NORTH 1 inch = 1,600 feet 0 Exhibit 1 800 1,600 2,400 Feet " [

United States Department of the Interior FISH AND WILDLIFE SERVICE Sacramento Fish and Wildlife Office 2800 Cottage Way, Room W-2605 Sacramento, California 95825-!846 In Reply Refer To: 81420-2009-F-0952-4 AUG 2 9 2012 Ms. Laura Duchnak Director, BRAC PMO West Department of the Navy Base Realignment and Closure Program Management Office West 1455 Frazee Road, Suite 900 San Diego, California 921 08 Ms. Sheila M. Cullen Network Director, VA Sierra Pacific Network (VISN 21) VA Sierra Pacific Network (10N21) Department of Veterans Affairs VISN21 CAM Headquarters 201 WalnutAvenue Mare Island, California 94592 Subject: Biological Opinion on the Proposed Naval Air Station Alameda Disposal and Reuse Project in the City of Alameda, Alameda County, California Dear Ms. Duchnak and Ms. Cullen: This is in response to the U.S. Department of the Navy's (Navy) and the U.S. Department of Veterans Affairs' (VA) May 21, 2012, request for formal section 7 consultation with the U.S. Fish and Wildlife Service (Service) on the proposed Naval Air Station Alameda (NAS Alameda) Disposal and Reuse project in the City of Alameda, Alameda County, California. Your request for formal consultation was received by the Service on May 24, 2012. At issue are the potential effects of the proposed project to the endangered California least tern (Sternula antillarum browni) (least tern) and threatened Pacific coast population of the western snowy plover (Charadrius alexandrinus nivosus) (snowy plover). The Service concurs with your determination that the proposed project is likely to adversely affect the least tern. The Service also concurs with your determination that the proposed project may affect, but is not likely to adversely affect the snowy plover. This document is issued under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), and represents the Service's biological opinion on the effects of the proposed project to the least tern.

DRAFT CITY OF ALAMEDA, CALIFORNIA March 6,2013. Ms. Laura Duchnak, Director Navy BRAC Program Management Office 1455 Frazee Road Suite 900 San Diego, California 92108-4310 Dear Ms. Duchnak: Support for Modification of the Surplus Determination for the former Naval Air Station, Alameda Thank you for the Navy's cooperation with the closure, disposal and reuse of the former Naval Air Station, Alameda ("NAS Alameda"), pursuant to the Economic Development Conveyance Agreement between the United States of America and the former Alameda Reuse and Redevelopment Authority for the conveyance of portions of the Naval Air Station Alameda dated June 6 2000 ("EDC MOA"). We look forward to implementing Amendment No.2 to the EDC MOA dated January 2012 and a prompt conveyance of surplus NAS Alameda property to the City of Alameda, as the successor to the Alameda Reuse and Redevelopment Authority. The City has monitored the Navy's activities to remediate and dispose of the former NAS Alameda property very closely and we support the Navy's decision to modify its surplus determination and continue Federal ownership of approximately seventy-four (74) acres of formerly surplus property in the Northwest Territory portion ofnas Alameda. We thank you for your continuing support to the City of Alameda. If you have any questions, please call Ms. Jennifer Ott, Chief Operating Officer, Alameda Point at 510-747-4747. Sincerely, City of Alameda By: John A. Russo, City Manager Exhibit 4 4823-9349-1986.1 City council Exhibit 4 to Agenda Item #6-8 03-05-13

FORMAL TERM SHEET BETWEEN U.S. DEPARTMENT OF VETERANS AFFAIRS AND THE CITY OF ALAMEDA, CALIFORINA This Formal Term Sheet (this "Term Sheet"), dated as of the 4th day of February, 2013 (the Effective Date ), will serve to express the mutual understanding of the U.S. Department of Veterans Affairs ( VA ) and the City of Alameda ( City ), as the successor in interest to the Alameda Reuse and Redevelopment Authority with respect to the proposed acquisition by VA of approximately 624 acres of land, more or less, located at the Alameda Naval Air Station in Alameda, California, by means of a transfer from the U.S. Department of Defense ( DOD ), Department of the Navy ( Navy ), pursuant to Base Realignment and Closure ( BRAC ) law, and more specifically identified in Exhibit A to this Term Sheet ( VA Property ). VA intends to construct an Outpatient Clinic, a columbarium, and administrative offices (together, the Facilities ) on a portion of the VA Property. Hereinafter, VA and the City may be referred to individually as a Party or collectively as the Parties. RECITALS WHEREAS, approximately 74 acres of the VA Property, more specifically identified in Exhibit B to this Term Sheet (the Flex Parcel ), is part of an area known as the Northwest Territories ; WHEREAS, The Flex Parcel is part of the Northwest Territories Planning Area as identified in that certain NAS Alameda Community Reuse Plan dated January 1996, as amended, and was originally intended for conveyance to the City by Navy in accordance with that certain Economic Development Conveyance Agreement dated June 6, 2000, as amended ( EDC Agreement ), pursuant to Section 2905(b)(4) of the Defense Base Closure and Realignment Act of 1990, as amended; WHEREAS, due to the location of a California least tern colony, an endangered species, on the VA Property to the south of the Flex Parcel, VA, the City, and Navy reached an agreement in principle that the City would forego the Flex Parcel and support the Navy transfer of the Flex Parcel to VA in order for VA to construct the Facilities a sufficient distance away from the California least tern colony; WHEREAS, The U.S. Fish and Wildlife Service ( FWS ), or other FWS-approved entity, shall manage the California least tern colony, and VA s use of the VA Property shall be governed by, among other documents, the Biological Opinion on the Proposed Naval Air Station Alameda Disposal and Reuse Project issued by FWS on August 29, 2012 (the BO ), and a Memorandum of Understanding between VA and the Navy currently pending signature by both entities; WHEREAS, VA shall maintain a commitment to the continued protection of the California least tern in accordance with the foregoing documents;

TERM SHEET Page 2. WHEREAS, the City intends to construct and maintain a sports complex ( Sports Complex ) to the northeast of the Flex Parcel and a park (the Park ) to the northwest of the Flex Parcel, and without the Parties agreeing in principle as to access and utility usage, the public will not have access to the Park via a public roadway, and adequate public utilities will not be available in the Northwest Territories Planning Area, and further, without the City agreeing to forego the Flex Parcel, VA would be unable to construct the Facilities as originally planned; NOW, THEREFORE, the Parties agree as follows. AGREEMENTS ARTICLE 1. General Information. A. Non-binding. While this Term Sheet summarizes the basic principles and terms of the Parties agreement in principle, it is not intended to be and will not become contractually binding on the Parties. The Parties retain the absolute discretion to make modifications to the proposed terms and any proposed agreements as deemed necessary, to mitigate significant environmental impacts; to select other feasible alternatives that will avoid such impacts; to balance benefits against unavoidable significant impacts before taking final action; and may determine not to proceed with the transactions contemplated herein, based upon the information generated by the environmental review process; B. Navy Involvement. The Parties agree to consult with Navy to assist the City and VA, as necessary, to ensure compliance with existing agreements to which Navy is a party. ARTICLE 2. Road and Utilities on VA Property. A. Access Easement. After VA takes control of the VA Property, and subject to availability of funds and approval by the Secretary of Veterans Affairs, VA shall grant a limited deed of easement to the City for the road ( Road ), planned to run along the northern boundary of the Flex Property, for public right-of-way access to the Park in a form substantially similar to the form attached to this Term Sheet as Exhibit C. B. Utility Installation. VA intends to construct the Road and underground utility lines on the VA Property that extend to the western area of the VA Property. VA and the City s respective anticipated usages/capacity requirements for electricity, sewer, water, drainage, and other utilities to serve the western portion of the Northwest Territories are attached to this Term Sheet as Exhibit D. VA has reviewed and determined the anticipated utility usages/capacity requirements set forth in Exhibit D to be reasonable and demonstrate that VA is the primary beneficiary of any new utility

TERM SHEET Page 3. lines designed and constructed to serve the combined usages/capacity requirements of VA and the City. Subject to applicable Federal law and the availability of funds, VA shall undertake construction and installation of new utility lines (electricity, sewer, water, drainage, and other utilities) to serve VA s anticipated usages/capacity requirements and the City s anticipated usages/capacity requirements at VA s cost and expense as the primary beneficiary of such new utility lines. 1. Should the City require an easement in the future to access the utility lines on the VA Property, VA shall work with the City to issue a limited deed of easement substantially in the form attached to this Term Sheet as Exhibit C, subject to availability of funds and approval by the Secretary of Veterans Affairs. Any work undertaken by the City under such easement shall be at the City s sole cost and expense. 2. Should the City require an increase the size of the utility lines on the VA Property for its own usage in excess of the usage described in Exhibit D attached to this Term Sheet, any and all of the costs to effectuate such increases shall be borne by the City. The City acknowledges that VA cannot pay for any utility lines or other improvements for which VA is not the primary beneficiary or for which VA does not have a bona fide need. C. Utility Maintenance. Subject to receipt of required approvals and authorizations, VA shall grant licenses and/or easements at no cost to the City as needed for the City s access to and maintenance of utility lines that are located on the VA Property and that serve the Park area and/or Sports Complex. Any construction or installation work undertaken by the City under such licenses and/or easements shall be at the City s sole cost, and the City shall restore the VA Property to its prior condition upon completion of any such construction or installation, at the City s sole cost. The City acknowledges that VA cannot pay for any utility lines or other improvements for which VA is not the primary beneficiary or for which VA does not have a bona fide need. D. Road Construction. VA intends to construct the Road in close proximity to the northern boundary between the Flex Parcel and land to be controlled by the City. Subject to City Rules and regulations and after approval by the City Council, the City shall grant, at no cost to VA, easements and licenses as necessary for VA to design and construct the Road; provided, however, that the City is in control of the land on which such easements and licenses would be located at the time they are needed by VA. E. Fees. VA and the City shall each pay its respective pro rata share for any applicable utility connection charges and user fees. ARTICLE 3. Access to VA Property. The City s ideal route, and VA s preferred route, to access the VA Property is via West Redline Avenue, which will terminate at the

TERM SHEET Page 4. eastern boundary of the VA Property. Subject to City Rules and regulations and after approval by the City Council, City shall grant an easement at no cost for VA to (a) connect to existing utility lines that are located outside of the VA Property and will serve the VA Property (b) extend new lines to the eastern border of the VA Property to serve the VA Property. VA shall commission a survey of the easement and certify the deliverables to both VA and the City. ARTICLE 4. Infrastructure Outside VA Property. The Parties acknowledge that the infrastructure in the area of the Northwest Territories has not been improved in approximately 30 years and that it is in the Parties interests to work together to improve area infrastructure with minimal duplication of efforts. A. Utility Installation. 1. Upon VA s request, the City shall issue, at no cost to VA, one or more easements ( Utility Easements ) to VA for installation of utilities on the City s property. Subject to applicable Federal law and the availability of funds, VA shall undertake construction and installation of new utility lines (electricity, sewer, water, drainage, and other utilities) within the area covered by the Utility Easements to serve VA s anticipated usages/capacity requirements and the City s anticipated usages/capacity requirements at VA s cost and expense as the primary beneficiary of such new utility lines. 2. VA and the City s respective anticipated usages/capacity requirements for electricity, sewer, water, drainage, and other utilities are attached to this Term Sheet as Exhibit E. VA has reviewed and determined the anticipated utility usages/capacity requirements set forth in Exhibit E to be reasonable and demonstrate that VA is the primary beneficiary of any new utility lines designed and constructed to serve the combined usages/capacity requirements of VA and the City. Should the City later desire or require more capacity than the amount estimated on Exhibit E to this Term Sheet, VA shall have no obligation to cover the cost of any utility expansions. 3. The City s issuance of Utility Easements shall be deemed an exchange and consideration for VA agreeing to install the utility lines listed in Exhibit E of this Agreement. The City acknowledges that the City (separate and apart from VA) will benefit from certain of those utility lines once VA constructs them (the City Lines ), and once the City Lines are installed, the City will be responsible for maintaining them at no cost to VA. For purposes of clarity, the City Lines are currently identified as the following: electrical line running on Lexington Street from West Redline Avenue to West

TERM SHEET Page 5. Midway Avenue; and electrical, telephone, and CATV lines running on Lexington Street from West Midway Avenue to West Tower Avenue. B. Approach to VA Property. In order to extend utility services to the VA Property as contemplated in Article 4, Section A above, VA will need to disturb the existing infrastructure and improvements located in the area surrounding and leading up to the entrance to the VA Property, including areas outside the VA Property and areas within Utility Easements to be granted to VA (all of the foregoing, the Approach ) through excavation and other utility installation activities. Attached to this Term Sheet as Exhibit F are the City s design requirements for City street and right-of-way improvements, which the City desires VA to utilize when it restores the Approach after utility installation activities. 1. Provided that (i) VA engages in the utility installation activities, (ii) VA determines the costs to restore the condition of the Approach to the standards set forth in Exhibit F to this Term Sheet to be reasonable, and (iii) restoration of the Approach to such standards is within the authority of VA to undertake, VA shall, subject to applicable Federal law and the availability of funds, undertake construction and installation of right-of-way improvements surrounding and leading to the Approach at VA s cost and expense as the primary beneficiary of such improvements, in an amount not to exceed Seven Hundred Fifty Thousand Dollars ($750,000). VA s determination of cost reasonableness shall be based upon an independent cost estimate conducted by an architect/engineering firm designated by VA. 2. Once VA has completed all excavation and utility installation activities in the Approach, and after the Approach has been restored to the standards set forth in Exhibit F to this Term Sheet, subject to Article 4, Section B, Paragraph 1 above, the City shall assume all cost and responsibility to repair and maintain the Approach. C. Other Utilities. VA reserves the right to request access to, and the right to seek permission to extend, utilities from other locations instead of or in addition to West Redline Avenue. The City and VA agree to work together on such other easements if and as needed, at no cost to VA. ARTICLE 5. Public Transit. VA shall contact the local transit authority to seek to obtain extended public transit services to the Facilities at no additional cost to VA, and subject to applicable Federal law and the availability of funds. ARTICLE 6. Continuing Use of VA Property. Certain third-party entities currently access and use the VA Property, and the City desires for those continuing uses to be permitted until VA commences construction activities.

TERM SHEET Page 6. A. Third Parties. A list of third parties ( Third Parties ) who will be seeking lawful access to the VA Property to conduct certain approved uses, and a map of where such uses will be located, is attached to this Term Sheet as Exhibit G. B. Permitted Uses. VA will not permit any activities on VA s Property that will interfere with VA s mission, operations, and/or use of the VA Property, or any uses that would violate applicable law. All use of the VA Property shall at all times be subject to Federal law, the BO, and VA s security requirements. C. Licenses. VA shall have the discretion to either issue multiple licenses or one or more master license to permit the Third Parties continued use of the VA Property. Except to the extent VA otherwise stipulates, at its sole discretion, in any or each such license, each such license shall terminate or be discontinued when VA commences construction of the Facilities. ARTICLE 7. Pedestrian Trail. The City desires to construct and maintain a pedestrian trail ( Pedestrian Trail ) that runs along the southern and western borders of the VA Property. Subject to the approval of the Secretary of Veterans Affairs and availability of funds, VA shall issue a limited deed of easement to the City substantially in the form attached to this Term Sheet as Exhibit C, so that the City can construct and maintain the Pedestrian Trail. A. Cost. The City shall construct and maintain the Pedestrian Trail at its sole cost. Construction or maintenance activities shall be subject to payment of prevailing wages under the Davis Bacon Act (40 U.S.C. 3141, et seq.), and all applicable and relevant rules, regulations, and orders of the Secretary of Labor. B. Access. The City shall construct and maintain a fence or other barrier, the design and placement of which is subject to VA s prior written approval, to prevent pedestrians from leaving the Pedestrian Trail and the easement area. i. Pursuant to the terms of VA s easement, should one be granted, and due to national security requirements, VA may restrict access or revoke the Pedestrian Trail easement at its sole discretion. VA shall work with the City to provide reasonable notice of Pedestrian Trail closure when practicable. ii. Pursuant to the BO, the Pedestrian Trail will be closed to all pedestrian access during California least tern breeding season, typically running from April through August of each year. C. Pedestrian. For the purposes of this Term Sheet, the term pedestrian shall include foot traffic as well as bicycles.

TERM SHEET Page 7. ARTICLE 8. Stormwater and Drainage. It is in VA and the City s mutual interest and benefit to work together on the stormwater and drainage management activities affecting the VA Property and the Northwest Territory Planning Area. Subject to and in accordance with applicable Federal, state, and local law, and City, regional, state, and Federal restrictions and requirements: A. VA shall consult with the City during VA s design and construction of stormwater retention areas and drainage infrastructure to determine the feasibility of colocating needed City facilities on the VA Property and potential cost sharing and cost savings for design, construction, and maintenance responsibilities for such areas; B. The City shall grant an easement to VA in a mutually-acceptable location in the Northwest Territory Planning Area for VA to construct, subject to applicable Federal law and availability of funds, and at VA s own cost and expense, drainage improvements; and C. The City and VA agree to work together on drainage easements throughout the Northwest Territory Planning Area, if and as needed. ARTICLE 9. Light Sharing. VA and the City acknowledge that the BO contains light restrictions that require night-time ambient light in proximity to the California least tern colony to remain within a certain established maximum level. If they have not already entered into a separate agreement governing the same as of the date of this Term Sheet, VA and the City shall work together to ensure that both parties are in compliance with the BO light restrictions. ARTICLE 10. Support of the City. The City may submit requests to VA for support in an application for funding assistance (i.e., grant applications made to entities other than VA). VA shall respond within sixty (60) days, plus any additional time that VA may require, at its discretion, to the City as to whether VA is able, unable, and/or willing to support the City s venture. The substance of VA s response to such requests is at the sole discretion of VA and support cannot be guaranteed. ARTICLE 11. VA s Representations. Subject to the approval of the Secretary of Veterans Affairs, VA hereby represents to the City on and as of the Effective Date of this Term Sheet, VA has full capacity, right, power and authority to execute, deliver and perform the future actions described in this Term Sheet and all documents to be executed by VA pursuant hereto, and all required action and approvals therefore have been duly taken and obtained. The individuals signing this Term Sheet and all other documents executed or to be executed pursuant hereto on behalf of VA shall be duly authorized to sign the same on VA s behalf. ARTICLE 12. Notices. Notices shall be deemed sufficient under this Term Sheet and made in writing and submitted to the following addresses (or to any new or

TERM SHEET Page 8. substitute address hereinafter specified, in a writing theretofore delivered in accordance with the notice procedure set forth herein by the intended recipient of such notice): If to City: With a copy to: With a copy to: If to VA: With a copy to: City Manager City of Alameda Alameda City Hall 2263 Santa Clara Avenue Room 380 Alameda, CA 94501 jrusso@ci.alameda.ca.us General Counsel City of Alameda Alameda City Hall 2263 Santa Clara Avenue Room 380 Alameda, CA 94501 jkern@ci.alameda.ca.us George Schlossberg, Esq. Kutak Rock LLP 1101 Connecticut Ave. NW Suite 1000 Washington, DC 20036-4374 George.Schlossberg@KutakRock.com U.S. Department of Veterans Affairs Attn: Jessica L. Kaplan, Director Real Property Service (003C1E) 810 Vermont Avenue Washington, DC 20420 Jessica.Kaplan@va.gov U.S. Department of Veterans Affairs Office of General Counsel (025A) Attn: Cameron Gore, Esq. 810 Vermont Avenue Washington, DC 20420 Cameron.Gore@va.gov

TERM SHEET Page 9. With a copy to: U.S. Department of Veterans Affairs VISN 21 Attn: Larry G. Janes, Capital Asset Manager 201 Walnut Avenue Mare Island, CA 94592 Larry.Janes@va.gov ARTICLE 13. Modification; Waivers. This Term Sheet contains the entire understanding of the Parties, and may not be amended, modified or discharged nor may any of its terms be waived except by an instrument in writing signed by the Parties. A waiver of a specific provision shall not be deemed a waiver of any subsequent provision. ARTICLE 14. Interpretation. The headings and captions herein are inserted for convenient reference only and the same shall not limit or construe the paragraphs or sections to which they apply or otherwise affect the interpretation hereof. A. The terms hereby, hereof, hereto, herein, hereunder and any similar terms shall refer to this Term Sheet, and the term hereafter shall mean after, and the term heretofore shall mean before, the Effective Date of this Term Sheet. B. Words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders, and words importing the singular number shall mean and include the plural number and vice versa. C. Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons. D. The terms include, including and similar terms shall be construed as if followed by the phrase without being limited to. E. If any term or provision of this Term Sheet or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Term Sheet, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Term Sheet shall be valid and be enforced to the fullest extent permitted by law. ARTICLE 15. Further Assurances. The City and VA shall, upon the reasonable request of the other Party and subject to the discretion reserved by each Party in Article 1 above, and actions or omissions either party may unilaterally deem necessary and appropriate to ensure compliance with NEPA and the California Environmental Quality Act, execute, cause to be executed, acknowledged or delivered

TERM SHEET Page 10. any and all such further instruments and documents as may be necessary or proper, in order to carry out the intent and purpose of this Term Sheet. ARTICLE 16. Miscellaneous. A. Counterparts. This Term Sheet may be executed in multiple counterparts and/or with the signatures of the Parties set forth on different signature sheets and all such counterparts, when taken together, shall be deemed one original. B. Disputes. Any provision in this Term Sheet that purports to assign liability or require expenditure of funds to VA shall be governed by the provisions of the Contract Disputes Act of 1978, 41 USC 601-613, the Anti-Deficiency Act, 31 USC 1341 and 1501, and the Federal Tort Claims Act, 28 USC 2671, et seq. C. Congressional Involvement. The City represents, and it is a condition of this Term Sheet, that no member of or delegate to Congress, or resident commissioner, shall be admitted to or share any part of this Term Sheet, or to any benefits that may arise therefrom. This provision shall not be construed to extend to any agreement if made with a corporation for its general benefit. D. Jurisdiction and Venue. This Term Sheet shall be governed by Federal law, and the jurisdiction for any litigation shall be in the United States District Court, Northern District of California. ARTICLE 17. Exhibits. This Term Sheet shall include the following Exhibits: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Exhibit E. Exhibit F: Exhibit G: VA Property Flex Parcel Easement Utility Usages/Requirements on VA Property Utility Usages/Requirements outside VA Property City Design Requirements for Improvements List of Third Parties and Map [Signatures appear on the following pages.]

TERM SHEET Page 11. IN WITNESS WHEREOF, the Parties have caused their duly authorized representative to execute and deliver this Term Sheet. CITY OF ALAMEDA John A. Russo City Manager Date: RECOMMENDED FOR APPROVAL: Jennifer Ott Chief Operating Officer Alameda Point APPROVED AS TO FORM: Farimah Faiz Sr. Assistant City Attorney

TERM SHEET Page 12. State of California County of ) On before me,, (insert name and title of the officer) personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal)

TERM SHEET Page 13. UNITED STATES DEPARTMENT OF VETERANS AFFAIRS Name: Eric K. Shinseki Title: Secretary of Veterans Affairs Date:

TERM SHEET Page 14. Exhibits to VA-City of Alameda Formal Term Sheet Exhibit A VA Property

TERM SHEET Page 15.

TERM SHEET Page 16. Exhibit B Flex Parcel

TERM SHEET Page 17.

TERM SHEET Page 18. Exhibit C Form of Easement DEED OF EASEMENT The Department of Veterans Affairs, acting for and in behalf of the United States of America, hereinafter referred to as the Government, under and by virtue of the authority contained in 40 United States Code 1314 (116 Stat. 1139), having determined that it will not be adverse to the interests of the United States, does hereby grant and convey, for and in consideration of One Dollar ($1.00), and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, without covenant or warranty of any kind and subject to the conditions hereinafter stated, unto, hereinafter referred to as the Grantee, its successors and assigns, an easement and right of way for, hereinafter referred to as said facilities, to be on, over, under, across or through a portion of the, which the undersigned owns in the County of, State of, all as depicted and described on Exhibit(s) attached hereto and made a part hereof. The Easement is granted subject to the following conditions and provisions: 1. That the Government reserves unto itself rights for all purposes across, over, or under the easement area herein described; such rights, however, to be exercised in a manner which will not create undue interference with the use and enjoyment by the Grantee of said easement; provided, that any construction by the Government in connection with the rights so reserved shall be at the expense of the Government. 2. That said facilities shall be maintained, reconstructed, repaired, and replaced by the Grantee within the easement area without cost to the Government, under the general supervision and subject to the approval of the Government official having immediate jurisdiction over the property. The Grantee shall replace, repair, restore, or relocate any property of the Government affected or damaged directly or indirectly by the construction, reconstruction, installation, operation, maintenance, and replacement of said facilities all to the satisfaction of the Government official having immediate jurisdiction over the property. 3. No mining operations shall be conducted on the premises described above. No minerals shall be removed therefrom except such as are reasonably necessary incident to the utilization of the described premises for the purpose for which the easement is granted. 4. That the Grantee will indemnify and save the Government harmless from any liability or responsibility of any nature whatsoever arising directly or indirectly from the privileges herein granted.

TERM SHEET Page 19. 5. That all right, title, interest, and estate hereby granted shall cease and terminate effective as of the date of written notice from the Government to the Grantee, its successors or assigns, that there has been, (a) a failure to comply with the terms and conditions of the grant, (b) a nonuse of the easement for a consecutive two year period for the purpose for which granted, or (c) an abandonment of the easement. 6. That upon termination or forfeiture of the grant, the Grantee shall within a reasonable time thereafter, if so requested by the Government, remove from the land hereinafter described all structures, installations, and appurtenances thereto belonging to Grantee and restore the premises to the satisfaction of the Government. 7. That no advertisements, commercial, political or otherwise, will be placed or allowed on the property. 8. The Grantee does, by the acceptance of this instrument, covenant and agree for itself, its assigns, and its successors in interest in property herein conveyed, or any part thereof: (a) That it is now complying and will continue to comply with Title VI of the Civil Rights Act of 1964 and all the requirements imposed by or pursuant to the regulations of the Department of Veterans Affairs issued pursuant to that Title, and that the easement and its appurtenant areas and facilities, whether or not on the property involved, will be operated in full compliance with Title VI of the Civil Rights Act of 1964 and all requirements imposed by or pursuant to the regulations issued thereunder by the Department of Veterans Affairs and in effect on the date of this instrument, all to the end that no person in the United States shall on the ground of race, color, religion or national origin be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activities provided thereon; and, (b) That the United States shall have the right to judicial enforcement of these covenants not only as to the Grantee, its successors and assigns, but also to lessees and sub lessees and licensees doing business or extending services under contractual or other arrangements on the interest in property herein conveyed. IN WITNESS WHEREOF the Department of Veterans Affairs has caused this Deed of Easement to be executed in its name and on its behalf this Day of, 20_. UNITED STATES OF AMERICA, Acting by and through the Secretary, Department of Veterans Affairs

TERM SHEET Page 20. By Jessica L. Kaplan Director, Real Property Service CITY OF WASHINGTON ] ] DISTRICT OF COLUMBIA ] ON THIS day of, 20_, before me a Notary Public in and for said District of Columbia, personally appeared to me Jessica L. Kaplan, well known and known by me to be Director, Real Property Service, whose name is subscribed to the within instrument and acknowledged that he executed the same as a voluntary act and deed of the United States of America, within the scope of his lawful authority. [SEAL] Notary Public District of Columbia My commission expires:

TERM SHEET Page 21. Exhibit D Utilities on VA Property UTILITY LOCATION AND DESCRIPTION ESTIMATED CONSTRUCTION COSTS FOR VA REQUIREMENTS ESTIMATED CONSTRUCTION COSTS FOR CITY REQUIREMENTS ESTIMATED CONSTRUCTION COSTS FOR COMBINED REQUIREMENTS VA'S PROPORTIONATE SHARE OF COST NW Territories Utility Services Western Trailhead / Restroom Domestic Water Extend water, sanitary sewer and electrical $ 114,000 $ - $ 114,000 100.00% Sanitary Sewer service to the trailhead along the western $ 133,000 $ - $ 133,000 100.00% Electrical shoreline of the NW Territories $ 133,000 $ - $ 133,000 100.00% Northern Areas $ - On-Site Domestic Water Main $ 464,800 $ - $ 464,800 100.00% From East Property Line to OPC/Cemetery On-Site Sanitary Sewer Line tie-ins Force Main $ 467,600 $ - $ 467,600 100.00% On-Site Electrical $ 484,400 $ - $ 484,400 100.00% COST $1,796,800 $0 $1,796,800 100.00% Notes: - The City s anticipated future toilet facilities (1 Men & 1 Women w/ 1 WC/1 Lav each) and irrigation requirements outside the VA Property do not cause the VA water, sewer, or electrical line sizes to be increased in excess of VA s need. Should the City request access to VA s utility lines in the future for these purposes, no upgrade or upsizing in utilities is anticipated. Any and all upgrade or upsizing to accommodate the City s future requirements shall be done at the City s sole cost and expense.

TERM SHEET Page 22. Exhibit E Utilities Outside VA Property UTILITY Domestic (Potable) Water LOCATION AND DESCRIPTION ESTIMATED CONSTRUCTION COSTS FOR VA REQUIREMENTS ESTIMATED CONSTRUCTION COSTS FOR CITY REQUIREMENTS ESTIMATED CONSTRUCTION COSTS FOR COMBINED REQUIREMENTS VA'S PROPORTIONATE SHARE OF COST Water Main Extension Sanitary Sewer Sanitary Sewer Extension Sanitary Sewer Extension Extend a water main from the intersection of Main St and Stargell Ave to the VA Property $ 697,452 $ 183,255 $ 880,707 79.19% Install a lift station and gravity pipeline from VA Property to Monarch St $ 33,750 $ - $ 33,750 100.00% Install a gravity pipeline from Monarch St to Lexington St $ 84,500 $ 28,308 $ 112,808 74.91% Sanitary Sewer Extension Install a gravity pipeline from W. Redline Ave to Main St along the projection of Lexington St to connect to the existing Pump Station #1 $ 43,500 $ 14,573 $ 58,073 74.91% Dry Utilities West Redline Ave (from VA property line to Monarch St) Gas $ 28,500 $ - $ 28,500 100.00% Electrical Install joint trench in W. Redline Ave from the $ 150,000 $ - $ 150,000 100.00% Telephone VA Property to Monarch St $ 75,000 $ - $ 75,000 100.00% CATV $ 18,750 $ - $ 18,750 100.00% West Redline Ave (from Monarch St to Lexington St) Gas $ 49,400 $ 34,086 $ 83,486 59.17% Electrical Install joint trench in W. Redline Ave from the $ 260,000 $ 66,300 $ 326,300 79.68% Telephone Monarch St to Lexington St $ 130,000 $ 43,550 $ 173,550 74.91% CATV $ 32,500 $ 24,562 $ 57,062 56.96% Main Street Electrical Install electrical facilities from connection point in Main St through the Main Gate to W. Redline Ave and Lexington St intersection $ 700,000 $ - $ 700,000 100.00% Lexington St (from W. Redline Ave to W. Midway Ave) Gas $ 38,000 $ 26,220 $ 64,220 59.17% Electrical Install joint trench in Lexington St from W. $ - $ 73,000 $ 73,000 0.00% Telephone Redline Ave to W. Midway Ave $ 100,000 $ 33,500 $ 133,500 74.91% CATV $ 25,000 $ 18,894 $ 43,894 56.96% Lexington St (from W. Midway Ave to W. Tower Ave) Gas $ 38,000 $ 26,220 $ 64,220 59.17% Electrical Install joint trench in Lexington St from W. $ - $ 73,000 $ 73,000 0.00% Telephone Midway Ave to W. Tower Ave $ - $ 65,000 $ 65,000 0.00% CATV $ - $ 40,000 $ 40,000 0.00% Storm Drainage Install gravity pipeline(s) from the VA Storm Drain Pipeline & Outfall Property to the northern shoreline within Easement 1 - OPC $ 86,800 $ 53,200 $ 140,000 62.00% Valve Replacement Existing SD Outfall Lines A & B located North of Main Gate Entry & North of Hanger B20 $ 106,000 $ - $ 106,000 100.00% Storm Drain Pipeline & Outfall Install gravity pipeline(s) from the VA Property to the northern shoreline within Easement 2 - Cemetery $ 250,000 $ - $ 250,000 100.00% COST $4,743,952 $803,667 $5,547,619 85.51% Notes appear on following page.

TERM SHEET Page 23. Notes: - It is assumed that the trenching costs for the VA requirements alone and the combined VA and City requirements are similar, but that a small number of combined VA and City requirements will necessitate additional utility trench depth and width in certain locations. - The estimated cost for City requirements reflects the costs associated with the following: o Material cost of added empty conduits/ utility lines for use by the City in the future, at its sole cost and expense; o The delta increase in the trench size to accommodate the added empty conduits/ utility lines for use by the City in the future, at its sole cost and expense; and o The increase in labor due to the added quantity or increase in mass of empty conduits/ utility lines for use by the City in the future, at its sole cost and expense. - Dewatering of the water lines may be necessary, but insufficient data is available to determine the exact requirement. - VA will install a pit large enough to house a pump that complies with City requirements for a sanitary sewer lift station. - The combined VA and City requirements for the dry utilities within Lexington Street include electrical, telephone, and CATV, because these are to be constructed in a joint trench with the gas facilities due to limited available space within the street. - In addition to the costs detailed, additional costs may be incurred by the City or by VA, including, but not limited to: General Conditions 8%; Design Contingency 10%; Bonds 2%; Contractor's Fee (OH & Profit) 4.75%; Escalations 8.25%. These costs shall be borne by the Parties as to their proportionate share.

TERM SHEET Page 24. Exhibit F City Requirements for Right-of-Way Improvements The infrastructure of the Approach shall be constructed in accordance with the following regulations, subject to required approvals, applicable Federal law, and availability of funds: City of Alameda Municipal Code o Section XVII Sewer & Water o Section XIX Electrical Service o Section XX Floodplain Management o Section XXII Streets & Sidewalks City of Alameda Standard Subdivision Improvement Specifications and Design Criteria, dated April 1965 Alameda Municipal Power Material and Installation Criteria for Underground Electrical Systems, dated January 12, 2010 East Bay Municipal Utility District Regulations Governing Water Service East Bay Municipal Utility District Standard Specifications and Standard Drawings, Installations of Water Mains 20-inches and Smaller, dated July 2008

TERM SHEET Page 25. Exhibit G List of Third Parties and Map All events involve controlled access and security of Northwest Territories. Support equipment for most events includes portable restrooms, power generators, car carriers for vehicle related events such as ride and drives, and Mythbusters filming. 1. Area 51 - Car related shows and events: all involve driving of courses, usually include multiple hospitality tents, portable restrooms, water trucks, for up to 300 visitors. 2. Beyond Productions - Filming of "Mythbusters" television program - vehicle related experiments including crash tests, vehicle strength, human reactions and skills. 3. Antiques Faire - California's largest outdoor antique market; once per month, up to 12,000 visitors, hundreds of booths with products for sale, food vendors, portable restroom facilities. 4. Robert Bosche - vehicle sensor testing, up to 5 employees and 2 vehicles testing components for cars. 5. Tesla Motors - prototype vehicle testing by company design engineers. 6. Porsche Club - Monthly car club auto cross - performance course driving of Porsche Club member cars one Sunday per month. Up to 100 participants each day. 7. Makani Power - Wind power testing for alternative energy uses, primarily for maritime. Test using wind kites several times per week. 8. Jackson Marketing - ride and drive for tire dealers to try new Firestone tires. 9. Carlos Serrao Photography - Commercial still photography of runners in New Balance shoes. 10. Top Gear - filming of Café Racer television show segment with San Francisco city backdrop. 11. Light Ship Group - Hangar One vodka tasting event for distributors. Includes food, hospitality tents, Blimp rides, restroom facilities. 12. Tula Technology - Car related - testing of fuel efficiency car component prototype.

TERM SHEET Page 26.